So you’re ready to take your big step into the world of Cannabis? Well, you have come to the right place.
If you’re relatively new to the industry and don’t understand the retail needs of the Cannabis world, the best place to start is to look for an experienced consulting team that can help you with the process. Remember, the team at Chillin’ Buds are here to help should find yourself in pickle, this business is not for the faint of heart.
Here are some points to help you “weed” out misleading information:
BUILDING A STRONG BUSINESS PLAN
This is a critical step and generally should be one of the first things you start working on. Banks, and Landlords will require a professional plan in order to be viewed as a legitimate business owner that knows where they are going and what needs to be done. Not to mention, your business will benefit from strong branding, a business angle that differentiates you from your competitors, your marketing direction, financing, and skilled personnel.
Before starting into the cannabis business, I would highly recommend you start reading all things cannabis. There are many great e-books and resources to help you on your way. Don’t forget to get familiar with the Cannabis License Act, 2018 and visit the AGCO website for regulations governing this exciting new industry. https://www.agco.ca/content/cannabis-retail-regulation-ontario
The AGCO states “Individuals who have a Cannabis Retail Manager Licence are called “licensed retail managers”. Every retail store must have a licensed retail manager. The only exception is if the licensed retail operator is a sole proprietor or is in a partnership between two or more individuals, and will be both the licensed operator and performing the duties of the retail store manager for a particular store – in which case a Cannabis Retail Manager Licence is not required”.
You may not sell cannabis unless you are licensed and authorized by the AGCO, and you have a supply purchase contract with the Ontario Cannabis Retail Store (OCS). You may only sell cannabis obtained through the OCS. You may not sell cannabis subject to a Health Canada/Licensed Producer recall.].
Location, Location, Location! This will probably be your most daunting task. Searching for a location isn’t as easy as it seems. You will want to find a location where the gross rent is fair, and that the landlord is not overcharging you (i.e. premiums) just because you are a cannabis retailer.
The task of finding a good location means you need to be more than 150m away from any school. Remember, we don’t want to entice minors or adults or solicit them in any way directly or indirectly.
Don’t waste your time looking just anywhere, start by going on the AGCO website and find the list of municipalities that “opted in” for Cannabis Retail.
SIZE OF LOCATION
Bigger isn’t always better. I would say start with an average size store. Your retail space typically takes up the bulk of the area but you want to consider having enough space for your back office. Not to mention a bathroom - everyone needs that bathroom break ;)
OH, WHERE OR WHERE SHALL MY STORE BE?
Well, that’s a personal choice but you do want to create a checklist. Consider your daily route to the areas you are considering. You may want to also consider who your neighbours are. Is it a high traffic area? Can people find you easily? Can you be seen off the main driving route? How much competition is nearby? Do you have the right demographics? Is the route to the store under construction (road construction, building construction). Are there any plans by the city to build any schools in the near future?
TO INCORPORATE OR NOT TO INCORPORATE
The reason most businesses consider incorporating revolves generally around being held personally responsible. If you are a sole proprietor, that means you are putting yourself personally on the line should you be sued. My recommendation is to get incorporated!
WORKING WITH THE ALCOHOL AND GAMING ASSOCIATION (AGCO)
Your first step will be to ensure your finances are in check. Have you raised the capital required to start this business? Are your taxes paid up to date? Do you have a clean criminal record check? How’s your credit rating? These are a few of the things the AGCO will be considering before issuing a Retail Operating License.
RETAIL OPERATING LICENSE (ROL)
The next step will be applying for a Retail Operating Licence (ROL) with the AGCO. The fees start at $6,000 for the initial application, then an additional $4000 for the Retail Store Application, followed by $750 for the Retail Managers Licence. Once approved for your ROL (this can take up 3-6 months), you’re on your way.
The guidelines require that you be 19 years old or older, must not have been convicted or charged with any offenses under the Cannabis License Act or certain offenses under the Cannabis Control Act and Cannabis Act and finally, you must not be in default of filing a tax return or have any outstanding or past due tax.
Following your ROL, you will need to obtain your Retail Store Authorization (RSA). This is obtained by having your location secured, your lease or agreement to lease, your buildout complete, completing the placarding period, and passing 3 step approval process with the AGCO.
How much money do you need to build out a store and become operational? Hmmm, A LOT! Every store varies as it depends on size, but it is certainly important to consider that the cost will be upwards of $450k to enter into this business.
I still scratch my head here. This is a very big topic and I’m not entirely sure the regulations were built to be clear. Some key points…you have to be very careful about what and how you market your store and products. You cannot show people consuming cannabis on your website, social media and any other advertising angle. In fact, you also can’t advertise on outdoor advertising billboards, including digital or non-digital marketing road boards. Follow the rules or be prepared to be fined, get shut down or even have your licence taken away.
What you can do, however, is finding a creative niche to promote who you are, what you want to achieve, and your team without violating any of the AGCO’s regulations. The premise is that the government does not want Cannabis Retailers to appear like they are enticing anyone especially minors. Advertising does not discriminate against age, so you get where this is going.
If after reading this, you still feel up for the task, consider contacting our experienced team who can help you through the entire process.
OWNING A CHILLIN’ BUDS
Why re-invent the wheel? “Weed” like to help you take a load off. We’ve got the recipe and can help you delve into the government requirements and create a successful business model based on our existing stores. For more information, contact us at firstname.lastname@example.org.
Best of luck and see you out there!
Owner of Chillin’ Buds Inc.